After a day's breather, benchmark indices reverse losses on F&O expiry

Equity indices resumed their ascent on Thursday after a day’s breather, buoyed by banking and financial stocks, as the November series derivative contracts expired amid largely positive cues from global markets.

After a volatile session, the 30-share BSE Sensex ended 431.64 points or 0.98 per cent higher at 44,259.74.

Similarly, the broader NSE Nifty surged 128.60 points or 1 per cent to 12,987. Tata Steel was the top performer among the Sensex components, surging 5.16 per cent, followed by Bajaj Finance, Bajaj Auto, HDFC, HCL Tech, Axis Bank, HDFC Bank and Titan.

However, Maruti, ONGC, IndusInd Bank, Tech Mahindra and Infosys dipped up to 0.87 per cent.

Global markets perched near lifetime highs as optimism surrounding the Covid-19 vaccines progress was tempered by rising coronavirus cases in multiple countries.

Domestic equities witnessed sharp recovery led by sharp rebound in banking, financial services and insurance (BFSI) stocks and metals, said Binod Modi, Head- Strategy at Reliance Securities.

“BFSIs continued to remain as a key driving force for the market. Improved prospects of earnings recovery in the backdrop of improvement in collection efficiencies, better outlook for credit costs and possibility of reversal of provisions due to resolution of select large accounts along with better valuations attracted investors in BFSIs,” he added.

Heavy buying sentiment was also seen as November derivative contracts expired, analysts added.

“Today, the market regained its momentum during the second trading half, on the monthly derivative expiry day, led by bounce in the banking sector. Investors are awaiting the release of Q2 GDP data tomorrow. The market expects contraction on a YoY basis but improvement on a QoQ basis, reflecting recovery in economic activity,” said Vinod Nair, Head of Research at Geojit Financial Services.

BSE metal, basic materials, finance, telecom, healthcare and bankex rallied up to 4.13 per cent, while oil and gas index closed in the red. Broader BSE midcap and smallcap indices rose up to 0.94 per cent.

Elsewhere in Asia, bourses in Shanghai, Tokyo, Hong Kong and Seoul ended with significant gains.

Stock exchanges in Europe, however, began of a tepid note. Meanwhile, Brent crude futures, the global oil benchmark, was trading 1.32 per cent higher at $47.89 per barrel.